FACTS:

The case involves a petition for review on certiorari regarding the illegal dismissal of petitioner Lino Fernandez by respondent Manila Electric Company (MERALCO) for allegedly participating in an illegal strike. The Court of Appeals (CA) ruled that Fernandez was illegally dismissed and ordered his reinstatement with full backwages. This decision was upheld by the Supreme Court, becoming final and executory.

During the execution proceedings, both parties filed motions pertaining to the computation and inclusion of Fernandez's monetary awards. The Labor Arbiter denied MERALCO's motion to declare full satisfaction of Fernandez's monetary awards and also denied Fernandez's motion for recomputation and release of money. However, the Labor Arbiter ordered MERALCO to pay Fernandez additional backwages.

Fernandez then filed a notice of appeal and memorandum of appeal with the Labor Arbiter, but these were noted without action. Subsequently, Fernandez filed a verified petition seeking to annul the Labor Arbiter's order denying his appeal. The National Labor Relations Commission (NLRC) denied Fernandez's petition, and the Court of Appeals affirmed the NLRC's decision.

In response, Fernandez filed a petition for review on certiorari before the Supreme Court.

ISSUES:

1. Whether an appeal from orders issued by the Labor Arbiter in the course of execution proceedings is allowed.

2. Whether the National Labor Relations Commission (NLRC) can consider an appeal as a petition to modify or annul.

3. Whether Fernandez's reinstatement is still feasible considering the strained relationship between him and MERALCO.

4. Whether Fernandez is entitled to backwages and retirement benefits.

5. Whether Fernandez is entitled to attorney's fees.

6. Whether Fernandez is entitled to longevity pay, 14th month and 15th month pay, and other benefits and allowances.

7. Whether or not the petition filed by Lino A. Fernandez, Jr. before the NLRC should be considered as a Verified Petition.

8. Whether or not the NLRC erred in affirming the Resolutions of the Labor Arbiter.

RULING:

1. An appeal from orders issued by the Labor Arbiter in the course of execution proceedings is not allowed. The proper remedy is a verified petition to annul or modify the assailed order or resolution.

2. The NLRC can consider an appeal filed before it as a petition to modify or annul. The NLRC Rules of Procedure must be liberally applied to prevent injustice and grave or irreparable damage or injury to an illegally dismissed employee.

3. Fernandez's reinstatement is still feasible. The mere filing of the case and the alleged participation of Fernandez in an illegal strike do not automatically sever the employee-employer relationship. The confidential relationship necessary for invoking strained relationship as a ground for not reinstating an employee has not been established.

4. Fernandez is entitled to backwages from the date of his illegal dismissal until his retirement, subject to legal interest. He is also entitled to retirement benefits even if he receives separation pay.

5. Fernandez is not entitled to attorney's fees. The decision of the court, as embodied in the dispositive portion, is the controlling factor. Since the court's decision does not grant attorney's fees, Fernandez is not entitled thereto.

6. Fernandez's entitlement to longevity pay, 14th month and 15th month pay, and other benefits and allowances is subject to evidentiary support based on applicable CBAs, employment contract, and company policies and practice.

7. The petition filed by Lino A. Fernandez, Jr. before the NLRC should be considered as a Verified Petition.

8. The NLRC erred in affirming the Resolutions of the Labor Arbiter.

PRINCIPLES:

• The NLRC is not bound by strict rules of evidence and procedure.

• A liberal application of rules is preferred if it affords full relief to an illegally dismissed employee.

• An illegally dismissed employee is entitled to reinstatement as a matter of right, with separation pay as an alternative relief in certain circumstances.

• The doctrine of strained relations must be demonstrated as a fact and cannot be applied indiscriminately.

• The existence of a strained relationship is for the employer to clearly establish and prove.

• Reinstatement cannot be barred if the employee has not indicated aversion to returning to work, does not occupy a position of trust and confidence, or has no say in the operation of the employer's business.

• The mere filing of a case and alleged participation in an illegal strike do not automatically sever the employee-employer relationship.

• Strained relationship as a ground for not reinstating an employee may only be invoked for employees in sensitive positions that demand trust and confidence.

• Backwages shall include the whole amount of salaries, benefits, and bonuses to which the employee would have been entitled had he not been illegally dismissed.

• Retirement benefits and separation pay are not mutually exclusive.

• The dispositive portion or fallo of a decision is the decisive resolution and subject to execution.

• Final and executory decisions may generally not be modified, even to correct perceived errors.

• The winning party in a case acquires a vested right to the finality of the decision.

• The NLRC is tasked with the resolution of labor cases and has the power to reverse, modify, or set aside any judgment, decision, resolution, or ruling based on substantial justice.

• NLRC resolutions should be supported by substantial evidence and should not be arbitrary or capricious.